FINANCE: The cost of litigation to the health service could rise to “unsustainable” levels due to ‘no win, no fee’ lawyers and agencies “farming” complaints against NHS organisations, HSJ has been told.

The warning comes after George Eliot Hospital Trust in Warwickshire reported a 92 per cent year on year rise in the number of clinical negligence cases brought against it during 2010-11.

It received a total of 50 claims compared with 26 in 2009-10. Forty-four claims were closed during 2010-11, of which 19 were settled, potentially involving payouts. The cost of the claims has not yet been confirmed, but in 2009-10 topped £3.7m.

NHS Litigation Authority chief executive Steve Walker told HSJ that complaint numbers “have been rocketing”, increasing by as much as 30 per cent in 2010-11.

The authority, which handles legal cases on behalf of NHS bodies, has increased its charges to trusts by 10 per cent overall in 2011-12.

But even higher charges will be needed if cases keep increasing beyond 2011-12.

Mr Walker said: “We can’t sustain increases at that rate without massive increases in contributions from trusts.”

He told HSJ the major factor was the rise of no win, no fee agreements which, due to a change in legal regulations in 2005, allow solicitors to double their fees when they win compensation cases.

Law firms are supported by “complaints farming” agencies, which gather cases through advertising before passing them on to solicitors. Mr Walker said some agents even advertised in hospital waiting rooms.

The authority is expected to soon publish full national figures for litigation costs faced by the NHS in 2010-11. In 2009-10 the total cost of litigation to the NHS was £787m, of which £651m came from clinical negligence claims.